Russian lawmakers approve use of digital assets in international transactions

By Thomson Reuters Feb 27, 2024 | 6:56 AM

MOSCOW (Reuters) – Russian lawmakers on Tuesday approved draft legislation allowing digital financial assets (DFAs) to be used in international settlements, a move that may enable Moscow to shield some cross-border money flows from international scrutiny.

The green light from lawmakers comes as the West, led by the United States, threatens banks in countries such as Turkey and China with secondary sanctions for facilitating trade with Russia.

The legislation requires approval in Russia’s upper house of parliament and from President Vladimir Putin before it becomes law.

“Today, all settlements between our organisations and foreign ones go through the banking system, and accordingly, these settlements and interactions are visible, including to our enemies,” said Anatoly Aksakov, head of the financial committee in Russia’s lower house of parliament, the State Duma.

“They are putting pressure on banks, including those from friendly countries, so that these banks do not help Russian companies settle accounts with foreign organisations.”

Russia describes countries that have imposed sanctions over what Moscow calls a “special military operation” in Ukraine as ‘unfriendly’.

The legislation, Aksakov said, would allow for the banking system to be bypassed in transactions, reducing external influence, including from “enemies”.

A U.S. threat to hit financial firms doing business with Russia with sanctions has chilled Turkish-Russian trade, disrupting or slowing some payments for both imported oil and Turkish exports, seven sources told Reuters earlier this month.

Meanwhile, Russian business people in January drew attention to problems with settlements with Chinese banks.

(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Louise Heavens)